Fertilizer industry has expressed dismay at the federal government for not allocating any amount in budget 2019-20 to clear pending subsidy claims of over Rs 20 billion against supply of urea and DAP.
According to a letter written to Prime Minister Advisor on Finance, Economic Affairs and Revenue, Dr Abdul Hafeez Shaikh, Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) has appreciated the decision to maintain GST on fertilizer @2% which will encourage balanced use of fertilizers by the farmers; and claimed that it has always supported the government's initiatives to ensure affordability and availability of fertilizer to the farmers, besides being one of the leading contributors to the national exchequer (tax contribution equivalent to over 90% of the profits).
The letter states that the industry had participated in past subsidy scheme (2016 to 2018) and contributed approximately Rs 18 billion towards the scheme, however, the subsidy payments to the tune of Rs 20.67 billion are still pending.
"It is highly painful that the commitment of the government remained unfulfilled to-date, thereby shaking the confidence of this highly responsible and respectable strategic segment of the domestic industry," said, Executive Director FMPAC, Brigadier Sher Shah Malik (retired) in the letter.
He further stated, "It is noticed with dismay that the proposed budget (FY 2019-2020) does not reflect any allocation /provision for the pending subsidy payment. Withholding of such a huge amount results in cash flow challenges and resultant financial cost ultimately impacts on the end user (farmers)." He requested the Advisor to ensure provision/allocation of Rs 20.67 billion in the proposed Finance Bill for early release of pending payments on account of the subsidy on fertilizers passed on to the farmers in FY 2016/17/18.